Legal Library: Cases and Proceedings

The Federal Trade Commission has stopped scammers who the agency says facilitated an operation to prey on students seeking debt relief. The agency charges that the defendants pretended to be affiliated with the U.S. Department of Education, used deceptive loan forgiveness promises, and falsely claimed they were offering relief under the “Biden Loan Forgiveness” plan to lure students and collect millions in illegal upfront fees. 

After the FTC filed a complaint seeking to end the deceptive practices, a federal court temporarily halted the operations and froze the assets of Apex Processing Center and its owners.

In February 2024, under proposed orders settling the FTC’s charges, several defendants in the case—including Express Enrollment LLC, Intercontinental Solutions LLC, Ivan Esquivel, and Robert Kissinger were permanently banned from the debt relief industry and were ordered to turn over their assets to the FTC. In April 2024, the ringleader of the scheme, Marco Manzi, was also banned from the industry and was ordered to turn over assets as part of a settlement with the FTC.

In August 2021, the FTC and the Georgia Attorney General’s Office sued the co-founders of the Stem Cell Institute of America for marketing stem cell therapy to seniors nationwide using bogus claims that it is effective in treating arthritis, joint pain, and a range of other orthopedic ailments.

X-Mode Social and its successor Outlogic will be prohibited from sharing or selling any sensitive location data to settle FTC allegations that the company sold precise location data that could be used to track people’s visits to sensitive locations such as medical and reproductive health clinics, places of religious worship and domestic abuse shelters.

AT&T reached a settlement with the FTC over allegations that the wireless provider misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds.

As a result of a Federal Trade Commission lawsuit, investment advice company WealthPress has agreed to a proposed court order that would require it to refund more than $1.2 million to consumers and pay a $500,000 civil penalty for deceiving consumers with outlandish and false claims about their services. In April 2023, the FTC announced it was returning $1.2 million to defrauded consumers.

Womply and its CEO, Toby Scammell, have agreed to pay $26 million to settle FTC charges they preyed on small businesses in desperate need of PPP funding. The FTC’s complaint alleges they widely advertised that small businesses – particularly one-person businesses like gig workers – could successfully get PPP funding when they applied through Womply. The complaint charges, however, that more than 60 percent of Womply applications never resulted in funding.

In addition, according to the complaint, Womply and Scammell advertised that their automated processes and good customer service would help small businesses secure PPP loans fast. In fact, applicants regularly faced significant issues that slowed down or fully hindered their applications and were often unable to receive customer service assistance they were promised, according to the complaint.

Opendoor Labs Inc. promised to revolutionize home selling by offering to buy consumers homes for market value while reducing transaction costs. It promised to provide speed and certainty to home sellers while saving them thousands compared to selling on the market or selling traditionally, as the company describes such sales. Although Opendoor generally delivered on its promises to provide a faster and more certain transaction, it did not save consumers money. In fact, consumers who sold to Opendoor typically lost thousands compared to what they would have made on the market. Contrary to the company's marketing, it made submarket offers and had associated costs higher than in traditional sales. The company's marketing and the opacity of the transaction, however, left consumers unaware that they had lost money. The Commission approved a final order in this matter in October 2022. In April 2024, the FTC announced it was sending nearly $62 million in refunds to sellers deceived by advertising and marketing claims made by online real estate business.

The Federal Trade Commission is taking action against DK Automation and its owners, Kevin David Hulse and David Shawn Arnett for using unfounded claims of big returns to entice consumers into moneymaking schemes involving Amazon business packages, business coaching, and cryptocurrency. The FTC’s complaint alleges that the defendants promised consumers that they could “generate passive income on autopilot” when the truth was that few consumers ever made money from these schemes.

A proposed court order would require the defendants to turn over $2.6 million to be used to refund consumers harmed by their deception, as well as requiring them to stop their deceptive earnings pitches and follow the law.

The Federal Trade Commission is sending $2.8 million in refunds to consumers who were harmed by DK Automation and its owners, Kevin David Hulse and David Shawn Arnett, who used unfounded claims of big returns to entice consumers into moneymaking schemes involving Amazon and Walmart business packages, business coaching, and cryptocurrency.

On January 2, 2024, the Department of Justice on referral from the FTC filed a complaint alleging that California-based lead generator Response Tree LLC and its president, Derek Thomas Doherty operated more than 50 websites designed to trick consumers into providing their personal information for supposed mortgage refinancing loans and other services. These telemarketing campaigns, which made robocalls and calls to numbers on the DNC Registry, were illegal, as the telemarketers did not have consumers’ consent to be called.

Under a proposed order settling the FTC’s charges, Response Tree and Derek Thomas Doherty will be banned from making or assisting anyone else in making robocalls or calls to phone numbers on the FTC’s Do Not Call (DNC) Registry.

Biz2Credit, Inc., and its subsidiary, Itria Ventures, have agreed to pay $33 million in damages to settle the Federal Trade Commission’s charges that they deceptively advertised that consumers’ emergency PPP loan applications would be processed in an average of 10-14 business days when, in reality, the average processing took well over a month.

The FTC’s complaint that Biz2Credit’s application processing was riddled with delays, and the average processing time was double what the defendants claimed, with tens of thousands of consumers waiting more than two months for a final determination. Even though they were aware of these delays, the defendants continued to make their false timing claims to consumers until nearly the end of the program.

As a result of a lawsuit filed by the Federal Trade Commission and the Utah Division of Consumer Protection (DCP), the principals of a Utah-based real estate investment training company will pay $15 million and be banned from selling money-making opportunities under a court order they have agreed to. In addition, two of the primary real estate celebrities who endorsed the training have agreed to orders that require them to pay $1.7 million.

The Federal Trade Commission is sending more than $10 million in refunds to consumers who paid for a real estate investment training program that allegedly made empty promises about earning big profits “flipping” houses.  

The Federal Trade Commission is taking action against healthcare company Benefytt Technologies, two subsidiaries, former CEO Gavin Southwell, and former vice president of sales Amy Brady, for lying to consumers about their sham health insurance plans and using deceptive lead generation websites to lure them in. According to the FTC complaint, Benefytt also illegally charged people exorbitant junk fees for unwanted add-on products without their permission. The proposed court orders require Benefytt to pay $100 million in refunds and prohibit the company from lying about their products or charging illegal junk fees. Southwell and Brady will be permanently banned from selling or marketing any healthcare-related product, and Brady will also be banned from telemarketing.

Two tech support companies will pay $26 million to settle FTC charges that they bilked tens of millions of dollars from consumers, particularly older consumers, by duping them into buying computer repair services in violation of the FTC Act and the Telemarketing Sales Rule.

The Federal Trade Commission, 18 state attorneys general, and Puerto Rico sued Amazon alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon. 

The FTC filed a complaint against SuperGoodDeals.com, Inc. and its owner, Kevin J. Lipsitz, alleging that the defendants falsely promised consumers next-day shipping of facemasks and other personal protective equipment (PPE) to deal with the coronavirus pandemic. In addition, the FTC alleged that some of the other merchandise sold through the SuperGoodDeals website were falsely advertised as “authentic” or “certified.”

Kevin Lipsitz, who defrauded consumers by falsely promising “next day” shipping of facemasks and respirators to consumers at the height of the COVID-19 pandemic, will be banned from selling personal protective equipment (PPE) and be required to turn over more than $145,000 to the FTC.